Exemption notification exclusion fails where the product is not shown to be a milk food, preserving excise relief.

A product described as "spert" was treated as a protein food supplement, not a milk food, because the department did not establish that it squarely fell within the exclusionary description in Entry 14 of Notification No. 17/70 dated 1-3-1970. On that basis, the exemption under the notification remained available and excise duty exemption was upheld. The reasoning emphasised that where an exemption notification contains an exclusionary entry, the burden lies on the department to prove that the product answers that description before exemption can be denied.

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Issues: (i) Whether the product "spert" is a milk food falling within Entry 14 of Notification No. 17/70 dated 1-3-1970. (ii) Whether the product is exempt from excise duty under the said notification.

Issue (i): Whether the product "spert" is a milk food falling within Entry 14 of Notification No. 17/70 dated 1-3-1970.

Analysis: The product had earlier been considered on the same factual and technical materials, including expert opinions and ISI specification, and the consistent view had been that it is a protein food supplement and not a milk food. The Tribunal followed that earlier reasoning and treated the department as not having established that the product answered the description of milk food for the purpose of the exemption schedule.

Conclusion: The product "spert" is not a milk food and does not fall within Entry 14.

Issue (ii): Whether the product is exempt from excise duty under the said notification.

Analysis: Since the product was held not to fall within the excluded category in the schedule to the notification, it remained within the exempted class of goods. The Tribunal applied its earlier view in the same line of cases and accepted that the notification did not withdraw exemption from the product.

Conclusion: The product is entitled to exemption under Notification No. 17/70 dated 1-3-1970.

Final Conclusion: The appeal fails and the order granting relief to the assessee is sustained.

Ratio Decidendi: Where the department seeks to bring a product within an exclusionary entry in an exemption notification, it must establish that the product squarely answers that description; if the product is not shown to fall within the excluded entry, the exemption remains available.

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